In the scope of the work I do, as a real estate consultant, there are people who work out of sight of my clients, but who are in the first line of my true business partners. These are people from whom I learned and continue to learn a lot about the real estate business and real estate mediation. They are the people who provide fundamental support for the necessary legal security of the processes in which I am involved, supporting my clients.
So that I can better enlighten those who read me about the work and added value of these people, I invited Dr. Cristina Pinheiro for a conversation about her role and contribution to my business – consultancy in services and real estate businesses – as responsible for a procedural department in a real estate brokerage company.
This conversation took place on September 21st. Far from exhausting all topics related to a procedural department in this conversation, this will certainly be the first conversation… of many others that I will share in due course.
Marco Moura Marques: Cristina, first of all, I really appreciate you agreeing to have this conversation with me.
Cristina Pinheiro: I thank you.
MMM: For some time now, regardless of the objective I have now, which translates into creating relevant articles for my newsletter or for dissemination on my social networks, the truth is that I had some topics that I would like to develop with you in a longer conversation. I know we will not talk about everything today, but we will certainly have the opportunity to cover the rest at another time.
CP: Let’s leave some candy unwrapped…
MMM: That's right. So, to start, I ask you: who is Cristina Pinheiro and what does she do at Keller Williams?
CP: Okay… Cristina Pinheiro is a Solicitor and provides services at KW Alfa. Now stopping speaking in the third person… I have a degree in Solicitors and, at the moment, I am completing my training, taking a new degree, this time in Law.
MMM: Why?
CP: Because I think it is an added value, in addition to the fact that continuing to study is always wonderful, in all aspects.
MMM: How did you get here?
CP: I have worked in the field of Law since I was 21 years old. I was somewhat 'pushed' into this area, as I was a forensic employee for 12 years, in law firms. I was lucky to have been given the opportunity to try all the branches, everything that could be done… I was very lucky. And this meant that, at a stage in my life when I didn't really know what I wanted, I didn't have to choose a profession, because it was the profession that chose me. I fell in love with it and understood that it was time to become more professional and so I decided to get my degree. A little late, it's true, but that's when life allowed it.
MMM: It's never too late to learn... I'll come back in a moment to your more personal side, but now, to bridge the gap with the next question, I ask you: what is this “procedural department of a mediator real estate"?
CP: The procedural department of a real estate agent is the part of the organization that provides full support to the listing process, analyzing all relevant documentation to verify legal certainty. And, if necessary, it also obtains documents. Each document is in its right place and, although people today are more informed than they were a few years ago, many still have difficulties. And we are here to help them, obtaining property records, property registration certificates, licenses of use...
MMM: And I can state that…
CP: Yes.
MMM: So let me go back and ask you: what motivates you to be in charge of a procedural department?
CP: That's a great question, Marco. Firstly, as I already mentioned, my passion for Law. But this specific area of intervention of the procedural department of a real estate agency does not only concern the legal part. I am a person who needs to relate to other people. I really like talking to people. I like knowing that I'm part of a project where, through consultants, I can help make people happy. I like to actively participate in people's lives, especially because 'buying a house' is the most important business of most people's lives. And it is very satisfying to be able to see this happiness in them and, in this way, achieve this feeling of duty accomplished. In this project I do what I like, I apply my knowledge, it makes me want to study even more and, therefore, be an even better professional. I'm with people, I talk to people, I like people and participating in their life project.
MMM: I confirm that. You are, without a doubt, a people's person and you contribute a lot to what you said: making happy the people around you. We are also here for a more material aspect, otherwise we would not be able to survive, but this fulfillment through the happiness of others is something significant for all of us. I understand you perfectly.
CP: Thank you.
MMM: Look… let me make one more point with the idea of ‘making others happy’. I would say that you have an immediate client, who are real estate consultants. Which, in turn, have their clients: buyers and sellers, landlords and tenants. Right? We are talking about two ‘levels’ of clientele here. And you have to keep them both happy.
CP: Yes, that's true.
MMM: So let me ask you: what value can you give my clients? As I am a real estate consultant and you are in the procedural department of a real estate agency… Within what you do, what can you add with value to my clients?
CP: Marco, firstly, there is a value that I add to the real estate consultant, which will accrue to their clients. Through the training I give here at KW Alfa, the consultant will be much better able to provide quick and accurate answers to their clients' questions. And if not, you know that I'm just a phone call and a message away so I can respond and the consultant can provide an excellent service, which is what we look for in our consultants. From the clients' point of view, they can know that behind that consultant there is support from qualified people, which will give them security and peace of mind throughout the entire process of a business that is intended to be fluid and peaceful.
MMM: I'm going to tease you a little, saying that this is a procedural department, not a legal department...
CP: It's true.
MMM: I say this because I have some clients with whom I have to be especially careful to emphasize this. Especially because I myself, at times, may not have been very clear when I presented my professional services to them, leaving them with the idea that I work with a legal department that will advise them legally on a series of procedures. But not quite…
CP: No, not at all. We are part of a real estate agency and not a lawyer or solicitor's office. Our experience and legal knowledge is essential, but we only provide legal support. To obtain all the documentation that supports a property listing, it is necessary to have this legal support. And that is why the procedural departments of all real estate agencies are equipped, I hope, with legally qualified professionals. In fact, we do not provide legal support, but we can and should refer people to qualified professionals who can advise them.
MMM: I confess that I will start to be more careful in this necessary clarification with my clients, especially because I was recently misunderstood by one of them and, at a certain point in the process in which I supported him, he requested me and 'my legal department' so that, according to him, we can give an opinion on a specific legal problem. I realized that it was my mistake, in terms of prior clarification of this topic with him. But I did so and everything was resolved, and he sought qualified legal advice from his lawyer.
CP: Yes, it happens sometimes. It is always essential that clients receive this advice from their own professionals, lawyers or solicitors. Because they are able to turn to professionals and present them with all the necessary documentation to resolve the problem. Documentation that is sometimes not given to us and/or we do not receive the necessary information to give them the best advice.
MMM: So, a procedural department is closely linked to the activity of a real estate consultant because it is part of a mediation company. So, in which phases of the consultant's work with his clients does the procedural department most frequently intervene?
CP: As I said before: the training given, which is essential and important. And this knowledge can be shared and acquired even before the property listing process. And, therefore, this is properly prepared, so it is an added value to have this procedural support. When the listing process occurs, we intervene to validate all documents and update them, as this is necessary to ensure legal security. We are dealing with a large business and it is necessary to validate all parties involved, namely whether, in fact, the people are the owners of the properties or whether there are still some registrations to be carried out. I'll give you an example: registration is not constitutive of the right. Now explaining this is sometimes difficult, because property is transmitted by the mere effect of the contract. However, registration serves to publicize. And transactions carried out (especially older ones) are not always recorded. It is necessary to direct people to carry out these procedures and only a professional procedural department can do this well. Then there are other phases: the long-awaited phase of the purchase and sale promissory contract, which needs to be drafted, the lease contract... and then the completion of this dream with the much-desired deed or authenticated private document. In the deed, as a definitive purchase and sale contract, it is also necessary to ensure that everything runs smoothly.
MMM: Right. Now to specify something you said that has to do with registration. Registration is, above all, for the purposes of publicizing the act that is the contract between two parties. If there is no registration, this does not render the act ineffective. But, for example, I can accompany my client-seller to a deed with documents for the property to be sold where the registration of the purchase of the property by my client was not carried out and present to the solicitor or notary evidence that the definitive purchase and sale contract (the deed) was actually carried out and that, therefore, my client has the right to sell the property, because he actually purchased it. Is this possible?
CP: Yes, it is possible, but it will depend on something. For example, Mr. Anthony purchased a property and it is duly registered in his name. However, the people who are selling the property are Mr. Anthony's sons and daughters, his heirs. And those situations, death and inheritance, are not included in the legal documents of the property to be sold. In other words, the person's names that are disclosed in the legal records of the property do not belong to the actual sellers of the property, at the time of the deed. However, through an heir qualification, Mr. Anthony's heirs are qualified to proceed with the effective sale of the property. Civil law overrides the Property Registry Code. However, there is an article in the Property Registry Code, which is article 8ºA, in paragraph iii, which states that it is not mandatory to carry out this intermediate registration, that is, to register the qualification of heirs. So, when we reach the moment of the deed or authenticated private document, before the notary, lawyer or solicitor, we can present this documentation to explain the transfer of this property (let's use this term for simplicity) and prove the effective ownership of the heirs.
MMM: I think you cited a very common example.
CP: Yes, it happens a lot. People can register the qualification of heirs, but they are spending money unnecessarily, as at the time of the actual sale they can use this documentary proof.
MMM: Often, in these inheritance situations, they are even registered in the Tax Office, because of tax obligations such as IMI (property tax)…
CP: Yes and because the death is declared to the Tax Office, as per legal obligation after death. Qualification of heirs is not a mandatory document, but for the effective sale it is mandatory.
MMM: Very good. You spoke a moment ago about “deeds” and “authenticated private documents”... what are the similarities and what are the differences?
CP: In practice, the legal validity is the same. The public deed is carried out by a notary who is endowed with “public faith”. However, under Decree-Law No. 116 of 2018, lawyers and solicitors were given the powers to title legal transactions over real estate. The contractual principle is freedom of form, except when the law requires a special form. In the definitive purchase and sale contract, the law requires a special form, which is enshrined in the Civil Code: public deed or authenticated private document (DPA in Portuguese). That is why deeds are carried out by notaries; Solicitors and lawyers produce the DPA, that is, the authenticated private document.
MMM: In terms of effectiveness and legal security, is it the same thing?
CP: It's exactly the same. Only the procedure is different. As the name suggests, it is a contract that will be subject to authentication by a qualified professional. Our authenticated private document, for the entire validity of the act, is deposited by midnight on the day it is drawn up.
MMM: Is there any type of real estate transaction that requires the deed and not the DPA or are we free to choose one or the other?
CP: In the real estate business there is no obligation at this level. When producing an authorization of heirs, this must be carried out by public deed, because it limits the validity of the declarations made by the head of the heirs, which must be made before an agent who has public faith. In other words, it is not exclusively linked to the real estate business, but it often ends up being linked, as it is a phase that may be necessary.
MMM: Within your activity in a procedural department, where do you identify the area of greatest risk? Where do you have to pay extra attention and where does history tell you that “here” the biggest problems happen?
CP: Well, we have several situations... We have to analyze the documents carefully, we have to check whether, in fact, the property is registered in that person's name, which is the easiest. But, if it isn't (and it may not be because of what we've already said previously), we have to check whether there is a title that enables that person to be able to sell, otherwise we run the risk of helping that person to sell other people's assets and that's not it that is intended. We also check the necessary harmonization of areas, between the various property records, which is especially important in houses. We check the properties licenses of use, their existence and their date of issue, as the properties are often pre-dated 1951, the year in which the regulation requiring them was introduced; but it is still necessary to request proof of this situation, even if the property register may indicate that the property dates back to that year or mentions an endorsement that also mentions it...
MMM: You already warned me about that.
CP: Exactly! A City Council certificate may be required, and registration with the Tax Office is not enough. This way, we do not run the risk of there being a City Council certificate indicating that the building was built before the regulation came into force - prior to 1951 - but that buildings subject to licensing were verified in the same building and which did not exist in the previous cartography. And that, at least for now, is an impediment.
MMM: Very good. One detail that I share: I came across a situation, I think in the city of Santo Tirso, in which a property was built after 1951 but before 1960 and so on, and I came to the conclusion that in this municipality and in other municipalities...
CP: It's true, this Decree-Law I'm talking about is 38382/51 of August 7, but it did not come into force at the same time in all municipalities. Therefore, it is natural that there are different dates for validating the existence of a license of use. This has already happened to me and, therefore, it is always preferable and safer to request a City Council certificate, which will provide greater security for all parties.
MMM: Still in relation to the biggest risks that go through your procedural department... I have already experienced some situations of doubt, both in myself and in my clients, and which have to do with the 'authorizers'. Sometimes I come across situations where the seller claims that he purchased or inherited the property before his current marriage…
CP: Yes, I understand. It is sometimes very difficult to explain situations in which people bought the property when they were single and, in the meantime, got married and claim that the spouse does not have to participate in the sale of something that is only theirs... It can be very difficult. But we can simplify: if people marry in "general community of assets" regime, the assets they take into the marriage and those they acquire after the marriage belong to both and everything is simple. In the "community of acquired assets" regime, the spouses keep their own assets (those they took to the marriage) and their inheritances and what they acquire after the marriage, that is, it belongs to both of them. In the "total separation of assets" regime, both know what belongs to one and what belongs to the other and they know what belongs to both. This situation is clear. However, there is an exception: the nuance of the ‘family home’, in which there is protection by the law in relation to the other party. In other words, even though the property may only belong to one of them, if that property is considered a 'family home' for the other, then the other will have to authorize its sale. This consent is different from what occurs in the "community of assets" regime: in this one both are owners; in the "community of acquired assets" regime, the spouse must give their conjugal consent. As for the "total separation of assets" regime, you only have to do this if the property to be sold is the family home, and this is for the protection of the spouse.
MMM: And in the case of a company that owns a property that wants to sell that property, who are the authorizers? What precautions must be taken to ensure the operation is valid and what signatures are required?
CP: Very good question and it is a key question. I always give the example of the company XPTO, which has as its corporate purpose the purchase and sale of clothing, has 2 partners (shareholders) and even has another person other than the partners in the person of the manager. Who can sell the company's property? Now, it could be the manager, but only if the corporate purpose includes buying and selling properties, otherwise it will have to be the partners. There are several issues to be analyzed here and, therefore, the procedural department is important. It will assess what the company's purpose is, check whether, possibly, there is a minute of proceedings of company shareholders... In other words, this is a type of 'details' that may pass by someone... less knowledgeable, so to speak.
MMM: Still in this last example, imagine a limited company with a board of directors, in which the president has the power to sign alone. However, the company's corporate articles of association does not have to do with real estate transactions. Therefore, to sign the real estate mediation conract and, subsequently, the deed or DPA, you will need minutes of proceedings from the board of directors, right?
CP: Yes, sir.
MMM: Very well, now moving on to another topic. As you know, a proposed Law (or a Bill) of the Portuguese Parliament was recently promulgated by the President of the Republic, under the ‘More Housing’ political package. This proposal aims to implement a type of ‘simplex’ at the level of urban planning and in what directly affects our activity, it addresses the simplification of formalities in property purchase and sale transactions. What can you tell us about this?
CP: Okay, this 'package' will be a source of support for many conversations... This Law, which was approved - on 50/2023 - from what I have already analyzed, is perhaps the least controversial, despite also introducing some controversy . They promised several ‘simplexes’ over the years. But the intention of this Law is to reduce bureaucracy and also respond to real housing problems, increase the housing stock in the market, etc... I am convinced that this is the intention. I want to believe that all the necessary legal certainty is being ensured to make this Law effective. From what I have already read, which was not everything, I know that the Law came into force and that 180 days were given to make changes to several diplomas , with the RGEU (in English: General Regime for Urban Buildings) being one of them. As far as we are concerned, in real estate mediation, I think this will be the change with the biggest impact. In fact, the obligation to present a housing technical dossier, as well as a license of use, will be eliminated, even though the authenticating entity will have to make reference to this in the title. And this is capable of helping, firstly, those processes in which, due to lack of a use license, the properties remain 'stationary', unused, 'untransacted'. In the midst of this very bureaucratic process, these license of use requests comply with a series of bureaucratic requirements, with all the adjacent deadlines, which were not always met, to the despair of owners, sellers and buyers.
MMM: You mentioned something that I need to clarify, to make life easier for those who will read us: what is the ‘authenticating authority’?
CP: Notary, lawyer or solicitor.
MMM: Ah... in other words, what you are saying is that in the deed or DPA, even if that property does not present a license for use, and also in transactions in which a housing technical dossier was also required, with this new Law can it just be mentioned and recorded that these documents were not presented, but the transaction is duly formalized with this mention?
CP: That's the goal. But not in such a simple way, because then we have to differentiate whether the work was subject to prior control or not, whether the deadlines were met and whose fault they were not. We are trying to reduce bureaucracy but I think it will probably have a greater impact on new construction. I think that in used real estate maybe there isn't that much. We will have to wait and see the effect on each of these regulations, although I believe that the aim is to reduce bureaucracy and stop having so many people without homes and so many houses without people!
MMM: Right. So, until around March...
CP: By February 28, 2024, if I'm not mistaken, these diplomas will be changed. And, I hope, that the deadlines are not extended.
MMM: And then you will give us new explanations and updates.
CP: Yes, I will, one by one!
MMM: Cristina, I have some other themes that don't fit into this conversation, but that will remain for others, since they are more specific themes. Do you have anything you want to add now?
CP: I want to thank you very much for the conversation, I really enjoyed participating. I have a lot of contracts to make and a lot of properties listings to analyze, but I understand that it is important to talk about this. People are, nowadays, much more informed than they were a few years ago, but something is always missing and if they follow your social media you will be more enlightened. And we may no longer hear the answer “why are you asking me for this, no one has ever asked me for this”.
MMM: Thank you very much and see you soon!
CP: Thank you!
Do you need additional clarification on this topic? Do you need support when selling or buying a property?
Don't hesitate to contact me:
Marco Moura Marques
+351 967 035 966
marcomouramarques@kwportugal.pt
Komentar